Tag: mortgage insurers

Statement: House Tax Reform Legislation

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WASHINGTON — U.S. Mortgage Insurers (USMI) President and Executive Director Lindsey Johnson issued the following statement on H.R. 1, the “Tax Cuts and Jobs Act,” the comprehensive tax bill released by the U.S. House Ways and Means Committee yesterday:

“USMI is encouraged by efforts in Congress to simplify the current tax code for everyday Americans and to promote economic growth. Comprehensive tax reform holds the promise of allowing Americans to keep more of their hard-earned money, modernize the tax code to help working families and spur economic growth.

“The House Republican proposal represents an important start towards putting the American tax system on a more simple and sustainable path, but USMI is concerned that the current draft excludes the premiums paid by borrowers for mortgage insurance as part of the definition of ‘mortgage interest.’ Since 2007, the deductibility of mortgage insurance premiums has provided helpful tax relief for millions of middle class homeowners with low and moderate incomes. IRS data from 2015 show the mortgage insurance deduction was claimed on 4.1 million tax returns that year—the vast majority of those returns had incomes ranging between $30,000 and $100,000. This is clear evidence that this specific tax deduction should be preserved because it helps make homeownership more affordable for Americans who value and need this help the most. So long as mortgage interest remains tax deductible, as is the case in the House legislation, so too should mortgage insurance.

“We understand comprehensive tax reform is as challenging of an undertaking as it is important—and we know there are difficult choices that have to be made throughout the process. USMI supports many of the stated objectives of tax reform, but is concerned that current and prospective low- and moderate-income homebuyers will lose an important deduction that they have come to build into the cost of their mortgage. Therefore, USMI will continue to work with House and Senate leadership to ensure the final tax reform package includes this important provision aimed at helping bring down borrowing costs for responsible taxpayers who need it most.”

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U.S. Mortgage Insurers (USMI) is dedicated to a housing finance system backed by private capital that enables access to housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at www.usmi.org.

Statement: FHA’s Annual Report to Congress

Posted on by dcadmin

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For Immediate Release             

Media Contact: Dan Knight

202-777-3544

media@usmi.org

USMI Statement on FHA’s Annual Report to Congress

WASHINGTON — Today, the Federal Housing Administration (FHA) released its “Annual Report to Congress Regarding the Financial Status of the Mutual Mortgage Insurance Fund (MMIF) Fiscal Year 2016.” The following statement can be attributed to Lindsey Johnson, USMI President and Executive Director:

“Consistent with improvement in the overall mortgage credit market, we welcome the news that FHA’s single-family forward program and the home equity conversion mortgage (HECM) program are combined above the statutory required 2 percent capital ratio. Now that FHA’s single-family fund has climbed its way back, this moment presents an opportunity for the new Administration and lawmakers to consider a coordinated housing policy to ensure broad access to low downpayment lending while reducing the government’s footprint in housing and protecting taxpayers.

“FHA serves an important countercyclical role in the mortgage finance system. Following the financial crisis, FHA’s insured market share grew nearly 300 percent from its pre-crisis market and remains at elevated levels today — and it has taken nearly a decade for the MMIF to recover from serving this countercyclical role. Now that FHA is back to meeting the 2 percent ratio requirement, there is also an opportunity to focus on strengthening FHA’s capital standard, which is dramatically less than what is required of FHA’s private market counterparts, to make the agency more financially resilient going forward. Changes in market conditions, or changes in the very volatile HECM program, could easily push the FHA back into the red.

“Further, this is also the time to refocus the FHA back to its core mission. Fortunately, today there is a healthy low downpayment GSE mortgage market — backed by private mortgage insurance — available to borrowers so FHA no longer needs to play an oversized role in our housing market. Private mortgage insurers put their own capital at risk to mitigate mortgage credit risk, provided over $50 billion in credit risk protection since the financial crisis to the GSEs, and did not take any taxpayer bailout. And this market has been strengthened since the financial crisis as all MIs have all implemented significant new capital requirements, or the Private Mortgage Insurer Eligibility Requirements (PMIERs), which are stress-tested financial and capital requirements established by Fannie Mae, Freddie Mac and the Federal Housing Finance Agency, enhancing MI’s ability to assume mortgage credit risk in the future.

“The MI industry and FHA should serve complementary roles to promote broad and sustainable homeownership. To accomplish this, FHA needs to not only become more financially resilient, in line with the rest of the financial system, but also remain focused on its core mission of serving underserved communities. USMI stands ready to work with the new Administration and Congress to enhance a mortgage finance system that meets the needs of low downpayment borrowers while protecting taxpayers.”

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U.S. Mortgage Insurers (USMI) is dedicated to a housing finance system backed by private capital that enables access to housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at www.usmi.org.

Statement: New GSE Credit Insurance Pilot Program

Posted on by dcadmin

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For Immediate Release

September 27, 2016

Media Contact: Dan Knight

(202) 777-3547

dknight@clsstrategies.com

 

USMI Statement on New GSE Credit Insurance Pilot Program

WASHINGTON — Lindsey Johnson, President and Executive Director of U.S. Mortgage Insurers (USMI), said the following today upon the announcement from Freddie Mac about a new pilot program involving mortgage insurers:

“For the past four years, Freddie Mac and Fannie Mae have been experimenting with a number of structures to shift risk away from the GSEs to the private markets. The program announced yesterday for an offering with affiliates of private mortgage insurers is the latest addition to this effort. While it is good to see the GSEs continue to explore ways to reduce the government’s mortgage credit risk exposure, this new offering is effectively a form of credit insurance that Freddie Mac stated builds on its Agency Credit Insurance Structure (ACIS), which is a back-end credit insurance program. While some mortgage insurers are exploring and may ultimately participate in this new credit insurance program, we believe it is important to note that this new structure should not be confused with the deep cover, true mortgage insurance front-end credit risk transfer proposal that we and others have been advocating for.

As the FHFA seeks comment through the RFI process on additional ways to do greater front-end risk sharing, USMI continues to believe that MI is one of the best, time-tested forms of credit risk protection for our nation’s mortgage finance system. We also believe that using more traditional deep cover MI would be a key component to a sound housing policy in the future. Specifically, our industry proposes expanding the current risk protection provided by MI, which today guards up to 35 percent of a loan’s value, as a means of front-end credit risk transfer. This will significantly protect taxpayers while also ensuring borrower access to low down payment mortgages. Having the GSEs increase that protection coverage would put more private capital at risk—precisely what taxpayers and the economy need. Such an entity-based program would make greater use of private capital, put the GSEs and taxpayers in a more remote loss position, allow lenders of all sizes and types to participate, and, importantly, help ensure access to affordable homeownership. As it has been for the past sixty years, private MI can be provided consistently through all economic cycles. We look forward to continuing that dialogue with FHFA, Fannie Mae and Freddie Mac, policymakers, and other stakeholders.”

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U.S. Mortgage Insurers (USMI) is dedicated to a housing finance system backed by private capital that enables access to housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at www.usmi.org.